Change Orders are one of the most common, and most costly, parts of any construction project. They're also one of the most misunderstood.
If you've ever been on a job where out-of-scope work got done but never got paid, or where a COR sat in someone's inbox for six weeks while the budget quietly expanded, this guide is for you.
What Is a Change Order in Construction?
A Change Order is a formal modification to a construction contract that documents a change in scope, cost, schedule, or all three. When work goes beyond what the original contract covers, whether it's different materials, added scope, or unforeseen site conditions, a Change Order is how that work gets priced and approved.
Change Orders exist on both sides of the GC/sub relationship. A specialty contractor submits a Change Order Request (COR) to the GC when scope expands. The GC reviews it, rolls it into their own Potential Change Order (PCO), and submits an official Change Order (CO) to the owner for approval. Once the owner approves, the CO becomes part of the contract.
Simple in theory. Messy in practice.
"Most everything was email, sent whenever, to whoever, with whatever attached. Forecasting meant searching your inbox, hoping you caught everything, or cross-checking logs you knew weren't complete."
Heather Gould, Senior Project Engineer, Barton Malow
Key Change Order Terms: Definitions
What is a COR (Change Order Request)?
A COR is a formal request submitted by a subcontractor or supplier to the GC for compensation on out-of-scope work. It is a proposal, not an approval. Work documented in a COR is not billable until it works its way through the full approval chain.
What is a PCO (Potential Change Order)?
A PCO is the GC's internal tracking entry for a change that has been submitted but not yet approved. It represents cost exposure on the GC's forecast, money that may be owed but hasn't been executed yet.
What is a CO (Change Order)?
A CO is the formally executed contract modification, signed by the owner or their authorized representative. No money changes hands until the CO is signed. The CO supersedes the original contract for the scope it covers.
What is the difference between a COR and a Change Order?
A COR (Change Order Request) is a subcontractor's request to the GC for compensation on out-of-scope work. A Change Order (CO) is the approved, executed contract modification between the GC and owner. A COR initiates the process; a CO completes it. The gap between the two is where most projects lose money.
How the Change Order Process Works: Step by Step
- Out-of-scope work is identified.
- The subcontractor submits a COR.
- The GC logs a PCO.
- The GC reviews pricing and backup.
- The GC submits a CO to the owner.
- The owner approves or negotiates.
What Causes Change Orders in Construction?
Change Orders are a normal part of construction, not a sign something went wrong.
The most common causes are:
- Design changes
- Unforeseen site conditions
- Errors or omissions in contract documents
- Owner-directed changes
- Differing site conditions
No matter the cause, every Change Order follows the same path: scope identified, pricing requested, COR submitted, approval obtained.
What Is a T&M Ticket?
A T&M (time and materials) ticket is a field document that captures actual labor hours, crew members, equipment, and materials used on work that can't be priced in advance.
T&M tickets, also called T&M Tags, are filled out on the jobsite as the work happens and signed by the GC's superintendent as real-time confirmation.
T&M work differs from a standard COR because the cost isn't known upfront. It's common for emergency repairs, exploratory work, or any scope where the full extent can't be determined until you're in it.
Why T&M tickets are hard to manage
- Paper tickets get lost before reaching the PM's desk
- Supervisor signatures get skipped in the field
- Batches of T&M arrive weeks after the work was done, with no context
- Without a signed ticket and proper documentation, T&M work is difficult to collect on
"Trying to get through a stack of tickets like that every week on 10 different projects was crazy."
Noah Quest, Director of Operations, Shamrock Painting
Why Do Change Orders Go Wrong?
The Change Order process fails for one consistent reason: no shared source of truth. The GC has their log. Each specialty contractor has theirs. The owner has whatever they've been sent. None of them match.
The data reflects this:
- 92% of GCs still rely on email as the primary channel for Change Order review
- GC project managers spend 6 to 20 hours per week on COR administration
- 64.5% of GCs say Change Orders hurt their forecast accuracy
- 66% of GCs report that COR issues delay project closeout by 4 to 12 months
When CORs live in email threads, they get lost in revision cycles, buried in handoffs, and missed in forecasts. By the time someone catches the gap, it's often too late to fix it cleanly.
"Trying to keep track of all that backup through emails or paper tickets was a huge headache. You might not even realize something was missed until months later, when a subcontractor comes back with costs you weren't expecting."
Malachi Hays, Project Manager, Barton Malow
What Does Good Change Order Management Look Like?
Well-managed Change Orders share a few traits:
- Every COR is submitted in a consistent format, in one place, visible to the GC and specialty contractor at the same time
- T&M work is documented in the field with supervisor sign-off before the crew moves on
- The GC's COR log and the subcontractor's log match, with no reconciliation spreadsheet required
- The owner has real-time visibility into what's pending, approved, and outstanding
- Nothing surfaces as a surprise at closeout because everything was captured as it happened
"Without having a platform like Clearstory, you have to go to every trade contractor, get a list, make sure we all agree on the numbers, and it can be a really arduous task for trade engineers."
Lana Sarchiapone, Senior Engineer, Turner Construction
Frequently Asked Questions About Change Orders
(No changes to this section.)
- Are Change Orders common on construction projects?
- Who approves a Change Order?
- What happens if work is done without an approved Change Order?
- What is the difference between a Change Order and a Change Directive?
- How long does the Change Order process take?
The Bottom Line
Change Orders are unavoidable. Chaos isn't.
Good documentation protects the specialty contractor who did the work. Real-time visibility protects the GC's forecast. Transparency protects the owner's budget and the relationship with their builder. The process isn't complicated. It just requires everyone in the chain working from the same information.